What costs can Alloy include in transfer fees?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
val will not be withheld unreasonably. You immediately must notify us of any proposed transfer and must submit promptly to us the application for consent to transfer and any other required documents and information. Any attempted transfer by you without our prior written consent or otherwise not in compliance with the terms of this Agreement will be void, your interest in this Agreement will be voluntarily abandoned, and it will provide us with the right to elect either to deem you in default and terminate this Agreement or to collect from you and the guarantors a transfer fee equal to two times the transfe
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a franchisee attempts to transfer their franchise without prior written consent from Alloy, or does not comply with the terms of the franchise agreement, Alloy has the right to collect a transfer fee equal to two times the standard transfer fee. The standard transfer fee is $10,000. Therefore, an unapproved transfer could result in a $20,000 fee.
This policy incentivizes franchisees to adhere to the proper transfer procedures, ensuring that Alloy maintains control over who enters the franchise system. It also protects Alloy's interests by discouraging unauthorized transfers that could potentially harm the brand or violate the franchise agreement.
It is important to note that the transfer fee is nonrefundable, regardless of whether the proposed transfer is completed. This means that a franchisee will not get the $10,000 (or $20,000 in the case of an unapproved transfer) back, even if the transfer falls through for any reason. This is a fairly standard practice in franchising, as the franchisor incurs costs in reviewing and processing the transfer application, regardless of the outcome.